Internet radio fees threaten college broadcasters

Posted: Tuesday, August 27, 2002

By Jason WilliamsAssociated Press

SAN DIEGO -- The signal from San Diego State University's KCR station is so weak it can barely be heard on campus -- if at all. Yet for the past six years its eclectic programming has reached the entire world.

''The Internet has been a vital part of our broadcasting,'' said Rachel Bradley, 23, a graduate student and the station's general manager. ''It seems to be our lifeline to be an actual, viable radio station.''

KCR and many other college stations fear they'll have to give up their newfound ''antenna'' by year's end because of new webcasting fees.

For listeners, this could mean being cut off from most of the nation's 1,300 college radio stations, which operate on small budgets and play music not heard on commercial radio.

In June, the U.S. Copyright Office issued rates for royalties that webcasters must pay music labels and musicians for sound recordings. The minimum is $500 a year but fees are retroactive to 1998, and many college station's simply can't afford the assessments of at least $2,000.

For college stations and other nonprofit webcasters, the fees work out to two cents per listener per 100 songs, plus an 8.8 percent surcharge to cover temporary copies of music needed for streaming.

So a station playing 12 songs an hour around the clock would owe $23 per listener each year. Averaging 21 simultaneous listeners keeps the station at the $500 annual minimum. Beyond that, the station has to pay extra.

Because most college radio stations are classified as noncommercial, they cannot run ads to offset the additional costs. San Diego's KCR operates on a $3,500 annual budget -- a budget it spends down to the penny.

Should stations change their status to commercial, their royalties would more than triple. Commercial broadcasters pay seven cents per 100 songs per listener, and they, too, have been complaining and, in some cases, shutting down.

Webcasters and over-the-air radio stations already pay composers and music publishers royalties for the music they play, based typically on a percentage of their revenues.

But the music industry succeeded in persuading Congress in 1998 to require such fees from webcasters.

College broadcasters also fear yet-to-be-released record-keeping requirements; the Copyright Office is expected to rule soon on what information broadcasters must report about every song they play.

Stations say if the royalties do not shut them down, the administrative costs associated with the reporting requirements will.